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Soaring energy prices in Europe are forcing U.K. factories to shut down

Soaring energy prices in Europe are forcing U.K. factories to shut down

Europe is facing an extreme squeeze for energy supplies, with gas and power prices breaking records day after day

Europe’s energy crunch has forced a major fertilizer maker to shut down two U.K. plants, the first sign that a record rally in gas and power prices is threatening to slow the region’s economic recovery.
CF Industries Holdings Inc. said Wednesday it’s halting operations at its Billingham and Ince manufacturing complexes due to high natural gas prices, with no estimate for when production will resume. European gas and power futures tumbled Thursday on signs energy-intensive industries are curbing consumption.The move comes as Europe is facing an extreme squeeze for energy supplies, with gas and power prices breaking records day after day. The continent is running out of time to refill storage facilities before the start of the winter as flows from top suppliers Russia and Norway remain limited. There’s also a fight for shipments of liquefied natural gas, with Asia buying up cargoes to meet its own demand.

The crisis could have severe economic consequences. Soaring prices are exposing the risk of power outages this winter, according to Goldman Sachs Group Inc. Blackouts would likely send energy prices even higher, compounding concerns about inflation and adding to the rising costs businesses are already shouldering for raw materials.

CF has so far taken the most drastic move of companies operating in the region, but others are warning of the likely blow-back.High energy prices are creating “inflationary pressure on every other cost” that will end up being passed on to customers, said Pascal Leroy, senior vice-president of core ingredients at Roquette Freres SA, a food processing company based in northern France. And France’s top sugar producer, Tereos, warned of surging natural gas prices raising production cost for the company “tremendously.”

…click on the above link to read the rest of the article…

Four Reasons Why You Should Stash the Cash!

With inflation and gas and food shortages on the rise, it is an excellent idea to have some cash stashed for emergencies. I know we live in a world that believes that there is an ATM around the corner and keeping cash in your wallet or in your home is obsolete, but there are some events that will prove it is good to have some loose cash around.

1. Stolen Credit and Debit Cards

A few years ago, I used to run at a local park after I got off work. My workout sessions were only 35 minutes to an hour, so I was never particularly worried that my car would be broken into. However, one Friday when I returned to my vehicle, my windows were busted out, and my bag, which was hidden, was missing. I should have known better than to leave a bag in the car, but I never thought it could happen to me. (How many times have we heard that phrase and shook our heads?) There is nothing worse than having your wallet stolen and having to contact the credit card companies and the banks to tell them. Immediately, all purchasing power is put on stop. In my case, it was on a Friday, and I couldn’t get my debit card reissued until the following Monday. At that time, I did not have a stash of cash, and I had to borrow money from my family. This one event is what led me to having a stash of cash.

2. Limits on Large Purchases

Many families are experiencing financial difficulties because of Covid, and since people have been unable to pay their card debt, the banks have reduced the limits that they offer…

…click on the above link to read the rest of the article…

Third Largest US Chicken Producer Runs Out Of Chicken Wings

Third Largest US Chicken Producer Runs Out Of Chicken Wings

At this point, shortages of everything from microchips to potato chips are forcing American businesses to adjust to higher prices and supply shocks, while consumers are forced to pay higher prices at the store. And while high commodity prices (which have come off their highs in recent days as lumber, oil and iron prices declined) have retreated in recent days, we noted that these shortages are expected to last a long time.

One reason is that high prices are good for producers, and it’s too expensive for many companies to build out new production capacity right now. This dynamic is contributing to a looming chicken wing shortage in the US, which might remind some of the bacon-shortage hysteria that has occasionally gripped the US in the past.

Case in point: Sanderson Farms, the third-largest poultry producer in the US (whose engineering firm likely recommended them to suspend plans for plant expansion because prices on everything from lumber to steel to concrete to plastic to copper to machinery to labor skyrocketed, making building unaffordable) has decided that it will pass on expanding its operation despite surging demand for its product that has put it on the cusp of running out of chicken wings.

“I need a plant to open up next week, but it is not a good time to be building,” said Chief Executive Joe Sanderson, who Bloomberg quoted. 

As we have reported, demand for chicken in the US is through the roof. Without expansion, the nation’s third largest poultry plant can’t take any new orders:

“We’re totally sold out and we’ve had people call us to service them and we cannot take on anymore business, and that’s not a good place,” Sanderson said.

…click on the above link to read the rest of the article…

New bull chart for $30,000 copper price: porphyries nearly mined out

New bull chart for $30,000 copper price: porphyries nearly mined out

Bad moon rising over porphyry deposits. Radomiro Tomic, Chile. Image from Codelco.

Predictions for copper at double or triple today’s level is a fairly recent phenomenon – and bears still outnumber bulls as to what’s next for the bellwether metal.

Wall Street natural resource investment house Goehring & Rozencwajg Associates confirmed their place in the superbull camp this week, predicting a copper price north of $30,000:

“The previous copper bull market took place between 2001 and 2011 and saw prices rise seven-fold: from $0.60 to $4.62 per pound. The fundamentals today are even more bullish.

“We would not be surprised to see copper prices again advance a minimum of seven-fold before this bull market is over.  Using $1.95 as our starting point, we expect copper prices to potentially peak near $15 per pound by the latter part of this decade.”

The rosy demand side for copper has been well documented and Goehring & Rozencwajg focuses on supply, specifically depletion in their latest commentary.

Depletion, surprisingly, is not discussed that often in the industry and according to the authors is little understood, despite its fundamental importance for long-term supply trends.

Low and declining grades, uninspiring green and brownfield discoveries (with a few exceptions) and thin, slow project pipelines have become rules of thumb in the copper mining industry.

To those issues, the report adds copper miners’ habit of high-grading (mining your best quality ore first) and growing your reserves with a simple ploy – lowering cut-off grades when prices rise.

Even with prices well above $10,000 a tonne, these paper reserves cannot keep growing, according to  Goehring & Rozencwajg, specifically at porphyry deposits which produce 80% of the world’s copper.

…click on the above link to read the rest of the article…

Warning! Massive Shortages Are Coming

Warning! Massive Shortages Are Coming

“When the well’s dry, we know the worth of water” – Benjamin Franklin

Out of stock, in low supply, sold out, shortages…get used to seeing the terms all over this year and next as the just-in-time manufacturing and distribution system continues to sputter.  Several factors in Twenty-Twenty and Twenty-Twenty-One have caused shortages ranging from the absurd and humorous to the critical and deadly.  Of course, not having chicken nuggets or ketchup packets is just a slight inconvenience; however, it will hit you a little closer to home when manufacturers can’t get the raw materials they need.  Then, prices will continue to go up, and you will pay more for the products you need.  When life-saving medicines are in short supply, they may not be available to you and yours when you are sick or injured.  What is going on with these shortages, and will it continue?  How much worse could it get?

In this blog, I will examine why shortages are occurring, many of the shortages we are currently experiencing, possible future shortages, and what you should prep and brace for to insulate yourself from the effects of short supplies.

WHAT’S HAPPENING

Years ago, when you wanted a product or good, you had to place an order and wait.  If it was a popular product on a store shelf, in a back warehouse, or off-site at a holding warehouse, you could receive the product in a short amount of time.  If it wasn’t in stock somewhere, an order was placed with a manufacturer, and you would wait, and wait, and wait, until it was finally manufactured because enough other orders were placed to warrant that manufacturer to gather the necessary raw materials and fire up his machines.  It was such a different world just a decade or two ago.

…click on the above link to read the rest of the article…

“Get Ready For Some Serious Sticker Shock Very Soon: This Jump In Inflation Won’t Be Transient”

“Get Ready For Some Serious Sticker Shock Very Soon: This Jump In Inflation Won’t Be Transient”

Semiconductor Costs Could Lead to a Shock This Fall

Consumer confidence is key to how people plan to spend. You can see it in the chart below. And as the chip shortage grows, expect the higher prices to begin showing up in products, which could dampen confidence and eventually stall consumer spending.

The recent surge in chip prices hasn’t affected consumers, and stimulus has kept spending up while confidence has lagged. But that will soon change. Manufacturers have been eating the increase costs and not passing them on to consumers. With chip prices expected to rise every quarter this year, many companies will be unable to keep swallowing it, especially those with tight margins.

Manufacturers order semiconductors six months in advance. The choke points along the supply chain driving up prices and creating shortages will come to a head in the third quarter, when the next orders to replace inventories are delivered, according to the founder of SouthBay Research Andrew Zatlin.

Automakers will struggle to hold the line. At General Motors, for example, roughly 5% of the cost of goods sold is from semiconductors. The company has 11% margins, and a surge in chip prices will hit profits hard, according to Zatlin. And small business who sell to the likes of Amazon and Walmart with tight retail margins will be forced to raise prices even higher.

The impact should only spread from there. Which is why this jump in inflation won’t be transient as the Fed hopes. Every manufacturer with tight margins will be forced to raise and maintain higher prices. So get ready for some serious sticker shock very soon.

Bloomberg Markets Live , Vincent Cignarella, zerohedge, inflation, supply shortages, supply chains, price inflation

 

‘Please, Help Us!’: Supply Shortages Rock Wuhan As Outbreak Overwhelms Chinese Healthcare System

‘Please, Help Us!’: Supply Shortages Rock Wuhan As Outbreak Overwhelms Chinese Healthcare System

Summary: Here’s a glimpse of new virus-related developments that occurred overnight.

  • Total number of confirmed cases now 900+, 26 dead.
  • China restricts travel for 40+ million people as the death toll surges.
  • Two deaths have been reported outside Wuhan.
  • Some residents displaying symptoms are being turned away from hospitals.
  • Hospitals in Wuhan make urgent pleas for help and supplies.
  • UK and US governments tell citizens to avoid outbreak zones.

* * *

Asian markets closed on Friday for the Lunar New Year holiday, which officially begins on Saturday. But in China, the Communist Party leadership are scrambling to contain the virus as 13 cities in Hubei Province are now under quarantine, meaning more than 40 million Chinese will be forced to spend the holiday week at home, the South China Morning Post reports.

Health authorities reported 66 more suspected cases overnightas a result of broader criteria for people showing symptoms, bringing the total number of suspected cases to 236 as of Friday morning in Hong Kong. Among those cases, more than 100 are now in isolation. Across China, Hong Kong and Macau, authorities have closed schools and suspended the start of the new semester. Even Disneyland Shanghai has announced plans to close for the holiday.

As authorities in Beijing try to convince the world that they have the outbreak under control, researchers in the US and UK have warned that the total number of cases might be closer to 4,000, according to the New York Times.

Though it’s slightly out of date, this map is the most up-to-date accounting of the geographic dispersion of the virus.

…click on the above link to read the rest of the article…

This Is Going To Happen In 2016: “One Of The Greatest Commodity Plays Of All Time”

This Is Going To Happen In 2016: “One Of The Greatest Commodity Plays Of All Time”

While stock markets held strong near their all-time highs, the last year saw massive financial destruction in global commodities markets. Oil, gold, silver, steel, coal and other raw materials experienced price drops not seen since just before the the Crash of 2008. As an example of how bad it has gotten in the raw materials space one need only look at the Baltic Dry Index, which is used to assess the cost of shipping raw materials by sea. Signaling serious economic problems, the BDI recently hit its all-time low, surpassing even the lows hit during the last financial crisis.

That a significant financial, economic or monetary event will soon be upon us cannot be denied.

Yet within crisis there is opportunity, and knowing what can happen and how to position yourself accordingly ahead of the fallout will not only ensure that your wealth is preserved, but will help you thrive financially. While we have always urged those concerned with the state of affairs in the world to have a healthy storage of food and supplies in anticipation of supply disruptions or hyperinflationary monetary policy, a major financial event will, as it did following the last crisis, likely lead to significant gains in precious metals as investors the world over shift capital into the historical monetary asset of last resort.

As Future Money Trends explains in the following micro-documentary, there are three perfect catalysts for why silver and gold are headed to new highs in the very near future: low prices and global supply shortages, war, and the collapse of U.S. bond markets.

What we are about to show you is undeniable evidence… This is going to happen within the next year… Silver is likely the most undervalued asset available to investors today. 

Watch (Courtesy Future Money Trends):

…click on the above link to read the rest of the article…

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